I read with interest an article by Des Morgan in ScoopIt, "Start-Up Online Life Insurance Firm Breaks The Commission Mold".
Farmers seeking to protect their revenue in the event of illness and provide the funds required for estate succession planning now have a more affordable option with the launch of a new online website insurance provider.
Online website insurer Insurance4me.co.nz helps farm owners protect their key farm workers so they have the funds readily available to replace their farm worker in the event of illness or death and keep the farm ticking over.
Director Des Morgan says insurance is essential for farmers whereby funds may be required to assist with children who eventually want to take over the family farm, or to buy out siblings who elect not to be actively involved in the family business.
"Traditional forms of insurance for farmers have worked well in the past but now the advent of the internet can offer farmers discounts which save thousands of dollars in premiums by slashing commission fees by 50 per cent," Morgan says..
"Many people don't realise it but if you have signed up to pay three hundred a month in life insurance, then the broker has just walked away with a sizable, five to seven thousand dollars in commission," he says.
That's an average commission of 150-200 per cent on a client's first-year premium. Morgan says the internet can provides a significant saving for its clients by having them complete their own needs analysis.
Insurance4me is "no-advice" insurance provider which surveys all the major insurance companies, seeking the lowest premiums for farmers. "No agent calls with our service, but consumers can complete their own needs analysis via independent sites". These include www.sorted.co.nz and www.consumer.org.nz/reports/life-insurance/calculator.
"Instead, the onus is on the client to complete their own needs analysis and identify the amount of life insurance which meets their own circumstances. In return we discount the commissions by a minimum fifty per cent," Morgan says.
With the Investment Savings and Insurance Association (ISI) saying that many New Zealanders are still inadequately insured and continue to risk their financial security by failing to protect their greatest asset - themselves, Morgan believes bringing down the cost of insurance for consumers will go a long way to resolve this problem.
"After you take away the typical household mortgage, insurance is one of the biggest drains on a family and an individual's income. But by using this website, they can now take advantage of some real savings," he says.
"This means the savings made on insurance premiums can be spent on retirement plans like KiwiSaver, reducing debt, paying off the mortgage or investing in your child's education," Morgan says.
Morgan has a vast amount of experience in the industry, including eight years as NZ broker manager at Colonial Mutual Life and as a director of financial planning firm Endeavour Financial Services Ltd, which already has more than 1500 clients.
Morgan sees the introduction of an online business to his existing firm as an opportunity for clients to use a less personalised, low cost DIY service.
In an economic climate which is still uncertain, Insurance4me gives consumers the tools to take control of their life insurance, says Morgan.
Morgan uses Pinnacle Life as the first port of call for life insurance quotes, simply because they offer the cheapest term life insurance rates on the market. However he has agencies with all the major insurers.
If the client has a preference for other insurers such as AMP, AXA, Asteron, Sovereign, Tower, One Path (ex ING) and Fidelity Life, Insurance4me reduces its commission by 50 per cent to provide the 10 per cent discount on the life of the premium.